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Benchmark Japanese bond yields rise as war-linked inflation pressures mount
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Benchmark Japanese bond yields rise as war-linked inflation pressures mount
Jul 20, 2026 5:51 PM

TOKYO, July 21 (Reuters) - Benchmark Japanese government

bonds slid on Tuesday as domestic markets reopened after a

holiday, while energy-linked inflation pressures weighed on

sentiment ahead of a sale of super-long-term debt.

Here are a few details:

* The 10-year JGB yield climbed 2.5 basis

points to 2.73%. Yields move inversely to bond prices.

* U.S. Treasury yields rose sharply overnight, as investors

weighed whether rising oil prices tied to the widening U.S.-Iran

conflict could feed into inflation and keep the prospect of a

Federal Reserve hike alive.

* Japan's Ministry of Finance will sell about 300 billion

yen ($1.85 billion) of 40-year JGBs on Wednesday.

* "Today's JGB market is expected to see selling pressure

dominate. Higher crude oil prices and U.S. Treasury weakness

during the holiday period are likely to be viewed as factors

prompting sales," Keisuke Tsuruta, a senior bond strategist at

Mitsubishi UFJ Morgan Stanley Securities, wrote in a note.

* "The ultra-long-term bond segment may face some downward

pressure due to rising market volatility and the upcoming

auction of 40-year government bonds tomorrow," he added.

* Markets are also looking ahead to the Bank of Japan's

meeting, due next week, when it is expected to keep rates on

hold.

* "Given that the market has largely priced in interest rate

rises at a 'cruising speed' of once every six months, the focus

of this Bank of Japan policy meeting will be on if there's any

suggestion of an acceleration in the pace of hikes," Noriatsu

Tanji, chief bond strategist at Mizuho Securities, said in a

note.

($1 = 162.4800 yen)

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